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3 Top Food Stocks to Buy Now

The food industry is in an interesting place during the COVID-19 recession. While many small restaurants are struggling right now, consumers are flocking to grocery stores, as well as familiar quick-serve restaurants with easy digital  access and drive-through capabilities. At the same time, food delivery is obviously on the rise as well. 

Clearly, the industry is in a lot of flux right now. When that’s happening, investors should keep focused on big food brands with staying power, scale, and favorable growth prospects. Of course, that’s what one should always do, but now more than ever. In that light, here are three food-related stocks that look like good buys during August.  

Beyond Meat

In terms of long-term prospects, there’s perhaps no food company with a bigger market opportunity today than Beyond Meat (NASDAQ:BYND). The same goes for the entire plant-based meat industry, but Beyond Meat, as the only pure play in the market today, is the best way to play this trend. According to management, Beyond Meat is also growing far faster than any of its peers.

Beyond Meat just reported its second-quarter results, a time period during which most restaurants were closed for all or part of the quarter. While that caused Beyond’s food service segment to fall 60.7% during the quarter, the company’s retail segment from grocery stores skyrocketed 195%, yielding a total revenue growth of 68.5% over the prior year. Looking at the first six months of the year, which included two “normal” months, Beyond’s growth rate came in at 98.5%.

The global meat industry is a $1.4 billion industry, and consumers appear to be adopting and accepting plant-based meat alternatives at a strong pace. Still, the plant-based meat industry was only $12.1 billion in 2019, or less than 1% of the total meat industry. CEO Ethan Brown noted that Beyond experienced increasing household penetration during the quarter as well as increased purchasing on per-household basis during the pandemic.

That’s a powerful combination for growth. Although the near term is likely to be bumpy and uneven, look for Beyond to extend its leadership and grow strongly over the long term. After a slight pullback after its recent earnings report, now may be a good time to gobble up some shares.  


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